Performance of Mega, Large, Mid and Small Buyout Funds

by Tim Friedman

  • 12 Jan 2010
  • PE

The effects of the changing credit market and global economic downturn on different areas of the buyout industry can now be seen through examining the performance of different sized vehicles since the onset of the financial crisis in the third quarter of 2008. Mega buyout funds are now providing the worst returns over the one-year (-31.4%), three-year (-3.1%) and five-year (+23.9%) periods, while large buyouts are the second-worst performing fund type, returning +23.7% over five years, +9.9% over three years and -24.4% over one year. Small buyout funds have performed the best over one year (-12.9%) and three years (+18.6%), but the worst over five years (+21.5%).

All areas of the industry saw a drop in valuations since Q3 2008. However, it appears that the bottom has now been reached, and fund valuations are improving across the board. Mega buyout funds actually saw the highest increase in value in Q2 2009 (5.7%), having been most affected following the onset of the credit crisis, with fund values falling by 9.1% in Q3 2008 and by 21.9% in Q4 2008. By fund vintage year, small and mid-market buyout vehicles are the better performers for the most recent vintage years of 2004 – 2006. For vehicles launched in 2000 – 2003, mega buyout funds tend to be the higher performers. Mid-market funds have performed consistently well. For more information on buyout fund performance, please click here to see our research report with all the latest figures.

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